• WestProp more than doubled its interim dividend to 6 US cents a share from 2.7 cents despite profit after tax declining 6% to US$2.49 million
• Revenue increased 16.3% to US$14.91 million, supported by Millennium Heights, Pomona City and the first consolidation of Electro Properties, Sunshine Developments and BrickFusion Manufacturing
• Operating activities consumed US$684,954 during the half, while the shareholder loan increased to US$20.31 million 

Harare - WestProp Holdings, the Zimbabwean property developer behind Pomona City, Millennium Heights and Pokugara, declared an interim dividend of 6 US cents a share for the six months ended June 2026, more than double the 2.7 cents paid in the comparable period. Profit after tax fell 6% to US$2.49 million from US$2.65 million, while operating activities consumed US$684,954 during the period.

The dividend amounts to about 72% of the half year profit and compares with a payout of less than one third of earnings in the previous period. WestProp's decision to increase the distribution comes during a period of continued development expenditure, higher working capital requirements and increased reliance on shareholder and long term funding.

Revenue increased 16.3% to US$14.91 million from US$12.82 million. The increase came from the expansion of the group's operating base, with Electro Properties contributing US$2.19 million, Sunshine Developments US$1.55 million and BrickFusion Manufacturing US$0.65 million during their first period of consolidation.

Millennium Heights generated US$5.19 million compared with US$3.28 million previously, while Pomona City contributed US$4.99 million, an increase of 21.3%. Pokugara generated US$350,000 compared with US$5.43 million in the previous period following the completion of its sales programme.

The expansion in revenue did not translate into equivalent earnings growth. Gross profit increased 9.5% to US$7.49 million, taking the gross margin to 50.2% from 53.3%, while operating expenses increased 34.6% to US$4.19 million.

The changing business mix is important to the earnings profile. The three newly consolidated businesses contributed about US$4.39 million of revenue, while Pokugara's contribution declined sharply following the completion of its development sales. WestProp is therefore carrying a larger operating platform while individual property developments move through different stages of their revenue cycles.

Millennium Heights is now a larger contributor to group revenue and includes the Radisson Serviced Aparthotel development. The hotel is scheduled for completion in early 2027, adding an income producing hospitality asset to the group's portfolio once construction and commissioning are completed.

The Hills is moving towards another stage of commercialisation. Its championship golf course is scheduled for official opening in December 2026, while the second phase includes a luxury hotel and spa, branded residences, a shopping centre and offices. The group expects the second phase to generate approximately US$250 million in sales.

Pomona City remains a major contributor to current revenue while its development structure is being changed. The company has announced a scheme of reconstruction that will transfer the Pomona City land bank into Alpha Holdings Africa, creating a separate company for the development land while WestProp retains its income generating and operating assets.

The restructuring will change the composition of WestProp's listed asset base. Pomona City contributed US$4.99 million during the first half and recorded a gross margin of 57.7%, the highest margin among the group's reported development activities.

The terms of the transfer will therefore determine how the development value associated with the Pomona City land bank is allocated between Alpha Holdings Africa and WestProp. The financial statements do not disclose the final consideration or ownership arrangements for the new structure, leaving those details to the reconstruction documentation.

WestProp also approved a 100 for 3 share split that will increase the number of issued shares from 30 million to 1 billion. The restructuring is intended to increase the number of shares available for trading and improve accessibility of the stock on the market.

The balance sheet expanded during the period. Total assets increased 9.1% to US$261.79 million, while investment property increased 19.4% to US$188.39 million. The company attributed the movement to development activity at The Hills and the hospitality portfolio, together with the consolidation of Sunshine Developments.

The investment property portfolio includes land held for future development. The financial statements identify 161.51 hectares on Alps Road and 16.09 hectares along Borrowdale Road among the development land holdings. The latest valuation recorded no change in the value of the investment property portfolio during the period.

The development model requires capital to be committed before completed assets generate their full income contribution. The Hills golf course, the Radisson Serviced Aparthotel, Pomona City walk up flats and Chivhu EcoCity are at different stages of development and carry different paths to revenue generation.

Chivhu EcoCity is WestProp's first major development outside Harare. The project covers approximately 5,000 hectares along the Harare to Masvingo corridor and is planned around a population of up to 80,000 residents. The scale of the project gives WestProp another long duration development asset, with cash generation dependent on the pace of infrastructure development and property sales.

The cash flow statement provides a different picture from the income statement. Operating activities consumed US$684,954 during the six months, with approximately US$5.53 million absorbed through working capital movements. Higher customer balances and reductions in amounts owed by suppliers and related parties contributed to the cash requirement.

WestProp still ended the period with US$6.01 million in cash compared with US$5.64 million at December. Financing provided part of the support for the cash position, with US$4.61 million raised through long term payables.

The funding structure has expanded alongside the development programme. The shareholder loan increased to US$20.31 million from US$10.18 million, while long term payables increased to US$29.51 million from US$18.57 million. Dividends payable stood at US$3.68 million at the reporting date.

WestProp also paid US$1.32 million in dividends and US$640,000 in interest during the period. The combination of dividend payments, interest costs, working capital investment and development expenditure places greater importance on the group's ability to convert its development portfolio into cash generating assets.

The 6 US cent interim dividend represents a significant distribution relative to the company's first half accounting profit. Operating cash generation did not cover the dividend during the period, with the cash position supported by financing inflows and other movements.

The payout therefore needs to be considered alongside the company's development cycle. WestProp is retaining capital within the business through shareholder and long term funding while distributing a substantial portion of reported earnings to shareholders.

The development programme also changes the future composition of earnings. Millennium Heights is moving towards hospitality income through the Radisson Serviced Aparthotel. The Hills is moving towards golf, hospitality, residential, retail and office activity. Pomona City continues to generate development revenue before its land bank is separated into Alpha Holdings Africa.

The timing of these developments will influence WestProp's recurring income base. Completed hospitality, retail and office assets can provide rental or operating income, while development land generates returns through sales and capital appreciation.

The dividend policy will therefore increasingly interact with the pace of asset completion and cash conversion. A larger recurring income base would provide a different funding source for distributions from development sales and external financing.

WestProp's first half results show a company with higher revenue, a larger asset base and a substantially larger development platform. Profit declined because the additional revenue came with higher operating costs and lower gross margins.

The 6 US cent dividend also changes the distribution profile. WestProp is returning about US$1.81 million to shareholders from the half year earnings while continuing to fund a development portfolio that includes The Hills, Millennium Heights, Pomona City and Chivhu EcoCity.

The Pomona City reconstruction adds another financial consideration. The land bank generated a significant contribution to first half revenue and carried a high reported margin. The terms under which that asset base moves into Alpha Holdings Africa will determine the value and future earnings exposure retained by WestProp's listed shareholders.

WestProp's financial position is consequently being shaped by three movements at the same time. Development assets are expanding, financing requirements are increasing and distributions to shareholders have risen sharply.

The next stage of the group will depend on the conversion of its development pipeline into completed assets and cash generating operations. The Hills golf course and Radisson Serviced Aparthotel provide near term milestones, while Pomona City and Chivhu EcoCity represent longer duration development programmes.

The 2026 interim results place WestProp on a larger financial platform with a higher dividend commitment and a more extensive development pipeline. The cash flow generated by completed projects and the terms of the Pomona City reconstruction will determine how much of that expanded asset base translates into recurring income available to support future distributions.

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